So what’s in the new federal highway bill anyway? NAFTA superhighways

Some have tried to convince the public that the Trans Texas Corridor and NAFTA Superhighways are dead. But Congress recently passed a new, two-year federal highway bill, Moving Ahead for Progress in the 21st Century (or MAP-21), that not only gives priority funding to these ‘high priority’ trade corridors, it also makes it easier to hand them over to private corporations using controversial public private partnership (P3) toll contracts.

On July 6, President Barack Obama signed MAP-21 into law. As with most bills these days, Congress had to pass it in order for us to know what’s in it. Only the committee members, conferees, and lobbyists had the access to know precisely what was in it, and big business, big energy, and various and sundry special interests got just what they wanted — including state highway departments that got the environmental rules so relaxed, they can literally add toll lanes to any highway without so much as a public hearing or ANY study of the impacts, so long as it’s within the existing right of way.

Does it have-ta be NAFTA?
Americans have seen their jobs exported for two decades, and many argue NAFTA is what started the downward spiral. Though most high tech jobs have gone to Asia, U.S. manufacturing got outsourced to Mexico, and eventually to China, too. Even American agriculture is feeling the effects of NAFTA. You can drive through the San Joaquin Valley in California even now and see signs along what used to be a booming farm community criticizing Senator Barbara Boxer for using arcane environmental policy to destroy farmers’ ability to grow food in order to quietly enforce NAFTA’s import/export mandates.

Ditto for the Mexican trucking program that drew loud U.S. protests during the Bush Administration from truckers and those concerned with non-English reading drivers, smuggling, and illegal immigration, which Obama quietly approved in March 2011.

In June 2011, the Texas Legislature repealed the Trans Texas Corridor (TTC), a 4,000 mile network of multi-modal toll roads, toll rail, toll truck lanes, as well as tolled utilities, telecommunications, and pipelines of all sorts — that would all fall under the control of a private, foreign corporation for a half century. It was the most ambitious plan proposed of the NAFTA superhighways. The TTC would be gigantic, 1,200 feet wide, which is like four football fields end to end. Dubbed the biggest land grab in Texas history, it would be near impossible to traverse across or drive cattle or school buses under it, since the developer only had to build overpasses where it intersected existing interstates.

On the first leg, there would have been only 4 exits through the entire state of Texas and it would have displaced one million Texans. Since the developer also got the exclusive rights to the land surrounding the toll and railways, it would be granted a state-sanctioned monopoly and the ability to charge concession fees and choose all the gas stations, hotels, and restaurants on this captive audience revenue-generating corridor. So the TTC would have effectively bisected whole communities, crushed economic development along the remaining private property adjacent to the tollway, as well as cut-off access to huge parcels of farmers and ranchers’ land, rendering the parcels virtually useless.

The driving force behind Texas Governor Rick Perry’s ambitious plan was foreign trade — to accommodate the influx of what was initially thought to be goods from Mexico, but that soon got supplanted by even cheaper goods from China. The TTC’s primary purpose was to facilitate the free flow of people and goods across the border from the deep water port, Lazaro Cardenas, in Mexico into the interior of the U.S. and up into Canada.

Threat to sovereignty and freedom to travel
Texans immediately realized the threat to state sovereignty and property rights. They had a visceral reaction to having their land forcibly seized through eminent domain and handed to a foreign entity, Spain-based toll giant, Cintra. The more they learned, the less there was to like.

A fairly new financing and development agreement for the time, a P3, would be the primary procurement method for the TTC, and it was all negotiated in secret. Neither the press nor the Texas Attorney General Greg Abbott were allowed to see it. Abbott had to sue the Texas Department of Transportation (TxDOT) just to get it released.

The financial guts of the contract were still withheld until the eleventh hour prior to Perry’s re-election in 2006, under threat of yet another lawsuit — this time by property rights advocates. Texans discovered these P3 contracts included profit guarantees and non-compete agreements as well as financial incentives to manipulate speed limits to slow down the free routes and enhance speeds on the tollway. The non-compete clauses prohibit or penalize the state for the expansion of free alternative routes in order to ensure congestion on the free lanes and force more drivers to pay the toll.

Before a Texas-sized revolt ripped the project away from Cintra, the non-compete zone proposed for one P3 on US HWY 121 in the Dallas Ft. Worth area would have encompassed the entire counties of Collin and Denton for 50 years! Two of the fastest growing counties in Texas would not have been able to expand their major roads without paying a financial penalty to a foreign corporation! Public policy decisions and the freedom and safety of the driving public are supplanted to private interests when the state cedes its sovereignty and fiduciary duty to protect the public to a private corporation using P3s.

When the toll tax rate falls under the control of a private company, toll rates become punitively high, which is not only taxation without representation, it’s fascism. On another P3 project on a major interstate in DFW, I-635, the toll rates will be 75 cents a mile. On one for Interstate 35 also in DFW, toll rates being bandied about will start at closer to 80 cents a mile — with the free lanes purposely left to wither in unbearable gridlock for decades. Texans will soon pay dearly to get anywhere. It’s pay-up or become a second class citizen stuck in bumper-to-bumper traffic.

NAFTA Superhighways revived
So though TxDOT announced it was pulling the plug on TTC-35 in 2009, it scaled back the remaining corridors and re-named the Trans Texas Corridor to the ‘Innovative Connectivity Plan.’ The Federal Highway Administration officially concluded the TTC-35 project in August of 2010 by issuing a ‘No Action’ Record of Decision. However, Perry has continued to vehemently push a P3 program in Texas despite the public opposition and the expiration of P3 contracts in 2009, with only a few more exceptions granted during the 82nd legislature in 2011 — hence the P3s in DFW. Almost concurrently, the legislature removed the entire TTC chapter from the Texas Transportation Code in the same session.

Trans Texas Corridor resurrected, too?
Right before MAP-21 gained passage, TxDOT released a Request for Information (RFI) on June 22 regarding the SH 130 tollway, the only stretch of the Trans Texas Corridor TTC-35 to ever be built, seeking information from potential developers to build ‘ancillary facilities’ along SH 130 that could include gas stations, restaurants, hotels, and rest area development within the highway’s right of way.

It’s apparent TxDOT is getting into the land development business. This concept is identical to the Trans Texas Corridor. However, Section 228.053 of the Texas Transportation Code still gives the Department the authority to “contract with a person for the use of part of a toll project or system or lease part of a toll project or system for a gas station, garage, store, hotel, restaurant, railroad tracks, utilities, and telecommunications facilities and equipment and set the terms for the use or lease.” Consider this to be on the chopping block when the 83rd legislature convenes in 2013.

Leasing out the public’s right of way is horrific abuse of eminent domain that creates a monopolistic cash cow for a single developer and the State of Texas. Why shouldn’t the original landowners be afforded the opportunity to develop that land instead of the State? How can other facilities (gas stations, etc.) off the toll road be financially viable when there is a monopoly controlled by the state and a single developer actually located on the tollway itself?

NAFTA corridors get special treatment
So for a time, Texans thought they were finally rescued from the Trans Texas Corridor, thinking that if these trade corridors ever got built, it would be done as an existing free interstate of old — not these new-fangled ‘innovative financing’ P3s that compromise the public’s sovereignty over these critical arteries. Then, on June 22, TxDOT announced its intention to lease out the public’s right of way anyway, just like the Trans Texas Corridor was going to do, and on June 29, Congress passed MAP-21.

The three proposed NAFTA international trade corridors that connect with Mexico and Canada that are of primary interest in MAP-21 are: TTC-69/I-69 (from Laredo, Texas to Port Huron, Michigan), Canamex (from Arizona to Montana), and Ports to Plains (from Laredo to North Dakota). Three particular sections of the bill specifically advance the corridors. Several additional sections prioritize them through secondary means.

Section 1116 entitled ‘Prioritization of Projects to Improve Freight Movement,’ grants up to 95% federal funding for projects that improve the movement of freight. The bill also officially establishes a national freight program with a goal to ‘strengthen the contribution of the national freight network to the economic competitiveness of the United States.’ Ports to Plains Alliance heavily lobbied for these special freight programs. Both programs will shift funds away from other state and national priorities and the needs of individual drivers, and essentially give them to private companies who move freight, including exclusive truck lanes.

In SECTION 1104, Sec. 103(C)(iii) under the National Highway System, it states: “Highways on the Interstate System shall be located so as…to the maximum extent practicable, to connect at suitable border points with routes of continental importance in Canada and Mexico.”

Again the emphasis is being put on creating surface transportation connections between the three North American countries of Canada, the United States, and Mexico as yet another move closer toward the economic integration of the three countries in keeping with NAFTA.

The legal language here cannot be glossed over. “To the maximum extent practicable” carries with it a strong mandate to prioritize these trade corridors over other national priorities for ordinary Americans. Making the United States more dependent on other countries and shipping more jobs overseas can hardly be considered a legitimate national priority.

Also in SECTION 1104, it specifically makes two key designations: one for TTC-69/I-69 and the other for I-11 also known as Canamex. One of hang-ups for I-69 was the fact that it would not immediately intersect an existing interstate highway. So the segments under construction in the Rio Grande Valley could not be officially designated as I-69 unless the rules changed. The bill removes this requirement specifically for I-69 and says it does not have to intersect an existing interstate for 25 years.

In a letter to House leaders in May, ten Arizona and Nevada members of Congress urged support of the I-11 designation to complete the missing link connecting Phoenix to Las Vegas in the all-interstate Canamex international trade corridor from the border of Arizona to the border in Montana.

The lawmakers made the connection clear: “The completion of this corridor would provide total commerce connectivity between the United States, Mexico and Canada in the intermountain west, which is vital to the continued economic growth of the region.”

Though in the past this designation would guarantee federal funding, the restructuring of the national highway system gives the states more discretion with those funds. But there are other mechanism in MAP-21 to get these corridors special funding.

Panama Canal expansion
With two of the NAFTA superhighways in Texas, lawmakers on the House Transportation Committee held a hearing in May on the Panama Canal expansion and the coming trade tsunami through Texas.

According to testimony at the hearing, Tim Welch, Chairman of Transportation Excellence for the 21st Century, says Texas is not ready. Another expert testified that Texas needs an additional $1 to $3.5 billion in funding to prepare its roads and rail transportation systems for the supercontainers headed our way. But why should taxpayers foot the bill to ease the flow of goods and boost profits for multi-national global companies?

In addition, TxDOT released an announcement May 21, that it’s formed a Panama Canal Stakeholder Working Group that’s primarily comprised of representatives from the agriculture, manufacturing, port, logistics, oil and gas, trucking, and rail industries.

All roads lead to the completion of the NAFTA trade corridors.

SECTION 1120 entitled ‘Projects of National and Regional Significance’ further facilitates and even funds the NAFTA projects, but also prioritizes improving “roadways vital to national energy security.” Energy relates directly to the Ports to Plains corridor since one of its goals is to move wind power from West Texas around the state as well as to transport ethanol around the country.

While energy security may be in the national interest, taking thousands of acres of private property for massive international trade corridors is not be the most prudent way to secure it. For if the government can come in and steal your land for the benefit of another private party, Americans’ personal wealth and liberties are stolen with it.

American Arthur Lee said it best: “The right of private property is the guardian of every other right…and to deprive a people of this, is in fact to deprive them of their liberty.”

When a project receives the designation as a project of national and regional significance, it gets access to up to $500 million in federal funds to develop and construct it. Every NAFTA corridor will most assuredly receive this designation.

In another section of the bill, SECTION 1304 labeled ‘Innovative Project Delivery Methods,’ a project can receive up to 100% of the federal share in this category on a project that uses innovative “financing, or contracting methods” and if it “accelerates project delivery.”

P3s are considered innovative financing, and though policymakers know it costs taxpayers more to privatize a public road, they claim the ability to accelerate the project that wouldn’t otherwise have enough funding justifies their actions. While a P3 project is not likely to receive 100% federal funding (why would the government sell-off our public road to a private entity if the project is already paid for with tax money?), these private consortiums are sharks and solicit as much in federal and state subsidies as they can get away with in order to ‘socialize’ their losses.

Not one P3 project in Texas has been 100% funded by the private entity. In one case, the taxpayers brought three-quarters of the project cost to the table and the private entity, Cintra, a mere one-quarter. So this notion that the risk gets transferred from the taxpayers to the private entity is patently FALSE.

In Texas, there is an egregious example of the State pursuing a P3 for a managed toll lane project on US 183 in DFW that would be 100% paid for by $1.3 billion in taxpayer money, yet TxDOT is still handing it over to a private entity to become their toll collector and to maintain the road. The State can get away with charging far higher toll rates when they can outsource the sticky business of taxation to a private corporation. With the changes in MAP-21, the federal government is encouraging such public subsidies, too. It’s legalized THEFT of public assets.

So there are many federal funding sources embedded within MAP-21 to get the NAFTA corridors built.

Adding tolls galore without a public hearing
SECTION 1316, gives the states the ability to add toll ‘managed lanes’ within the existing right of way of a road without ANY environmental review, which also happens to be the mechanism that triggers a public hearing. So a highway department can literally come in and impose unlimited miles of toll lanes, HOV or HOT lanes, dedicated bus lanes, truck lanes, even privatizing the toll lanes using a P3, you name it, without ANY study of the economic, travel, or safety impacts and without a public hearing. Since virtually all toll projects, whether public or private, now require non-compete agreements that prohibit or limit expansion of free routes surrounding toll projects, virtually every American will be subjected to constant impediments to our freedom to travel either by being forced to pay or be permanently relegated to hampered mobility and congestion.

This section alone is one of the most damaging provisions in MAP-21. Coby Chase, Governmental Affairs Division at TxDOT, was sent up to Washington expressly to secure this change. He received a handsome 16% raise over the last year, coincidence? Likely not. This section completely strips out ANY accountability to the public and allows un-elected, totalitarian state highway departments, like TxDOT, to impose unlimited toll taxes at will. Your freedom to travel has just been taken prisoner.

Slush fund for both public & private toll projects
The Transportation Infrastructure Finance and Innovation Act (TIFIA) federal loan program will be expanded by nearly ten times, eventually up to $1 billion/year. What used to be a competitive program has now been changed to easy credit for any project, with special emphasis given to freight movement, ie – the NAFTA corridors. The Ports to Plains Alliance lobbied for and got special reduced TIFIA interest rates for rural corridors like Ports to Plains.

Taxpayer-backed TIFIA loans can also go to directly fund a private facility if the private facility provides a “public benefit for highway users by way of direct freight interchange between highway and rail carriers.” Another boon for freight-intensive NAFTA corridors.

There is no dedicated tax revenue that funds the TIFIA program (unlike the highway system which is largely funded by gas taxes), so it’s primarily going to be funded through yet more federal borrowing of money we don’t have. TIFIA can also use pensions or other government plans to capitalize the fund, which is scary considering retirees depend on this money and the first project to ever receive a TIFIA loan went bankrupt — a P3 toll project in San Diego called the South Bay Expressway declared bankruptcy in less than three years after opening. The traffic projections were off by nearly 40,000 cars a day. The taxpayers took nearly an $80 million loss on that TIFIA loan. This can hardly be considered a successful program, yet Congress just increased it almost tenfold and made it even easier to get one.

The TIFIA program has become a slush fund to finance P3s where private toll operators can easily snag public money to subsidize their losses on projects that have no business being built in the first place. Congress lets them exploit taxpayers this way by hiding behind the broad term ‘public benefit.’

Aside from the other ‘innovative finance’ giveaways in MAP-21, Congress adopted Senate provisions to give even greater tax breaks to private corporations — think P3s –by allowing them to depreciate PUBLIC assets, our public highways, up to 45 years (instead of 12-20 years). With all these incentives, designations, and funding mechanisms in place, the NAFTA superhighway system is clearly alive and well and in the process of becoming reality. Coupled with the severely relaxed environmental review exceptions that give state DOTs unlimited authority to do anything they want within existing right of way, Americans will be very hard-pressed to find ways to stop it.